Ohio is in the running for a $2 billion chemical plant
January 7, 2012
Ohio -- A giant chemical plant that processes natural gas is coming to
Midwest and Ohio leaders hope the state’s newly tapped gas deposits,
with growing industries that use gas products, make Ohio the favored
Chemical is finalizing plans for a $2 billion complex that is expected
create hundreds of jobs and pull other industries and manufacturers
orbit. Shell has said only that it plans to build in either West
Pennsylvania or Ohio, three states that overlay ancient shale beds rich
With a site
announcement imminent, interest in Shell’s decision grows keener by the
placement of the mega-refinery, called a cracker, could define where
major oil companies establish operations in the nation’s newest energy
the first of the major oil companies to make a big investment,” said
“Ned” Hill, a professor of economic development at Cleveland State
“Where that cracker ends up could end up influencing the regional
of Big Oil.”
states are reported to be offering tax breaks and other incentives to
lure Shell, which has given no hint of its affections.
select our preferred site we will announce it,” Shell spokeswoman
Smith said Wednesday. “That will probably be February.”
cities like Cleveland are not considered contenders but they could
affected. Any location will likely be rural, but not remote.
needs hundreds of acres of land, according to Dan Carlson, Shell
general manager of new business development in the Americas. Shell
like access to railroads, river barges, a skilled workforce and
researchers, Carlson said via email.
looking for is cost-effectiveness and ease in moving this project
quickly,” he added.
John Kasich flew to Houston in late November to make a personal pitch
executives and the state has provided written appeals from the
Republican allies and Democratic rivals alike, including Democratic
Minority Leader Armond Budish of Beachwood and U.S. Sen. Sherrod Brown.
officials will not divulge details of Ohio’s incentive package, citing
policy as well as a confidentiality agreement with Shell.
they (Shell) are doing their homework, as any large company would,”
Mustine, the general manager for energy at JobsOhio and a former energy
industry executive. “We’re just focused on providing the best
is a relative newcomer to the shale gas industry, with production
below those established in Pennsylvania and West Virginia, Mustine
state offers advantages that could lend Ohio an edge.
is one of the most wanted feedstocks for petrochemical production. A
so-named because it “cracks” ethane molecules to produce ethylene, the
plastic. So far, Ohio’s natural gas deposits have proven rich in
gases” like ethane.
important to a refiner like Shell, Mustine said, might be proximity to
manufacturers that use ethylene and its derivatives, like polyethylene,
ingredient in auto parts and many consumer products.
re-emerging auto industry and its well-established polymer and chemical
industries pose ready markets for the new petrochemical plant, he said.
wins the cracker lands an historic infusion of jobs.
Carlson said the construction project would span four to five years and
about 10,000 workers. The finished plant would need “several hundred”
the world-scale petrochemical plant is expected to draw related
would invest billions more. A March study by the American Chemistry
concluded that a Midwest cracker would spark another $1 billion to $1.5
in private investments by manufactures who want to be nearby.
also herald a huge step for the region’s nascent shale gas industry.
the nation’s ethane crackers operate near the Gulf Coast, the current
the U.S. petrochemical industry. There has not been a cracker built in
Midwest in a generation, according to the chemistry council.
skeptics have questioned Shell’s commitment to build from scratch in
Midwest, noting the Gulf Coast offers a working network of pipelines,
and storage facilities. Oklahoma-based Chesapeake Energy, the dominant
in Ohio’s Utica shale play, recently committed to shipping ethane south
pipeline, rather than processing it here.
has made a strategic decision to re-introduce gas refining to the
Carlson said via email. His company would like to crack ethane closer
Northeastern manufacturers, he wrote. What’s more, Shell believes
natural gas lies buried in the Appalachian rock to feed a number of
investing billions in Midwest shale gas, experts say, Royal Dutch Shell
making a statement others will heed.
don’t spend that kind of money if they’re not certain there’s a profit
said Terry Fleming, executive director of the Ohio Petroleum Council,
first announced its plans for a Midwest cracker in June, Fleming
Pittsburgh area held the advantage, due to its proximity to Ohio River
and Pennsylvania’s head start in shale gas production.
talking with Shell executives three weeks ago, Fleming said he’s not so
Ohio’s making it a very difficult decision,” he said.
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